EconomyxAI · Beige Book Sector Monitor June 2000Released June 14, 2000 · Data through early June |
| |
Conditions index +0.36 avg of 11 sectors, −2 to +2 |
| Outlook index −0.18 sectors with an outlook |
| Districts growing 9/12 per National Summary |
| Positive momentum 3/11 sectors improving |
|
|
This release in brief The read | ■ | Activity kept growing, but half of the districts reported a recent slowdown in retail sales growth. | | ■ | Autos and durable goods sales slowed with inventories rising for big-ticket items; tourism stayed strong in every district that mentioned it. | | ■ | Most districts reported rising manufacturing, with steel, petroleum products, semiconductors and high-tech equipment strong, while heavy trucks and construction equipment declined. | | ■ | Home sales fell below year-ago levels in more than half of the districts, while commercial real estate stayed strong and Manhattan office rents rose at a 35% annual rate. | | ■ | Energy activity improved sharply with natural gas up over 50% on the year, and most districts reported a slowing in loan demand, especially mortgages. |
|
Sector prospects Where the 3–12 month view points Strongest prospects Energy
XLE
▲ Improving | +0.80 |
| Information Technology
XLK
▶ Steady | +0.33 |
| Real Estate
XLRE
▶ Steady | +0.32 |
|
|
| Weakest prospects Financials
XLF
▼ Turning down | −0.27 |
| Utilities
XLU
▶ Steady | −0.08 |
| Consumer Staples
XLP
▶ Steady | −0.04 |
|
|
|
|
All 11 GICS sectors, ranked Sector scoreboard | # | Sector | −1 0 +1 | Score | Signal | Now | Outlook | Mom. |
|---|
| 1 | Energy
XLE | | +0.80 | Favorable | +1.12 | +0.50 | ▲ +1.06 | | 2 | Information Technology
XLK | | +0.33 | Leaning Favorable | +0.75 | n/a | ▶ +0.01 | | 3 | Real Estate
XLRE | | +0.32 | Leaning Favorable | +0.46 | −0.85 | ▶ −0.17 | | 4 | Communication Services
XLC | | +0.24 | Leaning Favorable | +0.40 | n/a | ▶ +0.04 | | 5 | Industrials
XLI | | +0.22 | Leaning Favorable | +0.67 | −0.12 | ▶ −0.07 | | 6 | Materials
XLB | | +0.16 | Leaning Favorable | +0.37 | n/a | ▶ −0.41 | | 7 | Health Care
XLV | | +0.14 | Neutral | +0.08 | n/a | ▶ −0.17 | | 8 | Consumer Discretionary
XLY | | −0.03 | Neutral | +0.31 | +0.06 | ▼ −0.62 | | 9 | Consumer Staples
XLP | | −0.04 | Neutral | −0.05 | n/a | ▶ −0.03 | | 10 | Utilities
XLU | | −0.08 | Neutral | +0.00 | n/a | ▶ +0.00 | | 11 | Financials
XLF | | −0.27 | Leaning Unfavorable | −0.20 | −0.50 | ▼ −0.54 |
Prospect Score blends current conditions, district outlooks, momentum, a sector-specific macro tilt and margins. Now = weighted current conditions; Outlook = n/a when too few districts gave one; Mom. = change vs the average of the two prior releases. |
National Summary, scored −2 to +2 Macro backdrop | Overall Economic Activity | | +1.00 |
Activity kept expanding, but Cleveland, Chicago and Kansas City moderated or cooled, St. Louis held steady and half of districts saw slower retail growth; Minneapolis remained 'hot'. | Labor markets tight throughout with 3-7% retail wage increases, but Chicago saw no intensification, Cleveland said markets were less tight and Kansas City retailers and manufacturers had fewer problems finding workers. | | Inflation Pressure (higher = headwind) | | +0.75 |
Most districts saw increasing inflationary pressures in petroleum products, natural gas, metals and paper, but manufacturers raised selling prices less than input costs; Cleveland retail prices rising faster. | Most districts reported a reduction or slowing in loan demand, especially mortgages, with Richmond and Atlanta commercial demand softening; Chicago, Kansas City and Dallas still strong. | Commercial markets expected to stay high, but contacts predict further residential slowdowns, Philadelphia expects slower growth and Dallas retailers are revising spending projections down; Boston expects strong growth through 2000. |
|
Current conditions in each Fed district District by sector | BOS | NY | PHL | CLE | RIC | ATL | CHI | STL | MIN | KC | DAL | SF |
|---|
| Information TechnologyXLK | +1 | · | · | · | · | +1 | +1 | +1 | · | · | +1 | +1 | | Health CareXLV | +1 | · | · | · | · | · | · | · | · | · | · | · | | FinancialsXLF | · | −1 | · | +1 | −1 | −1 | +1 | · | · | · | +1 | · | | Consumer DiscretionaryXLY | +1 | −1 | · | · | +1 | +1 | −1 | −1 | +2 | · | · | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | +1 | | IndustrialsXLI | +1 | +1 | +1 | · | +1 | +1 | · | · | +1 | · | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | −1 | · | · | · | · | | EnergyXLE | · | · | · | · | · | +1 | · | · | +1 | +1 | +2 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +1 | +2 | +1 | −1 | · | · | · | −1 | +2 | −1 | −1 | +1 | | MaterialsXLB | · | · | · | +1 | · | · | +1 | · | +1 | · | +1 | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
|
Top highlights What moved the scores Energy +2 Dallas Energy activity 'continued to accelerate'; firms working around the clock to meet demand. Why it matters: Dallas carries the largest Energy weight; the first +2 Energy read in the series. | Financials −1 New York Demand fell for consumer loans, nonresidential and especially home mortgages. Why it matters: New York is about 28% of Financials; its -1 dominates the weighted score. | Information Technology +1 San Francisco Semiconductor makers at very high capacity use with strong demand. Why it matters: San Francisco is about 47% of IT; a twelfth straight +1. | Real Estate +2 New York Leasing 'frenetic'; Manhattan office rents up at a 35% annual rate. Why it matters: New York's large weight keeps Real Estate positive despite residential slowing. | Consumer Discretionary −1 New York, Chicago, St. Louis Sales fell short of expectations; auto sales down 6% with SUV inventories high. Why it matters: Three negatives mark the first broad consumer slowdown in the series. | Real Estate −1 Kansas City, Cleveland, St. Louis, Dallas Housing starts down 10-20% from last year's record; home sales down 5-10%. Why it matters: Higher rates are now biting in interior housing markets. |
|
Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Activity continues at a high level. |
| New York Growing +1.0 Growing at a sturdy pace. |
| Philadelphia Growing +1.0 Outlook ▶ Expanded, but growth is easing. |
| Cleveland Flat Growth has moderated from the first quarter. |
| Richmond Growing +1.0 Strong pace with scattered signs of slowing. |
| Atlanta Growing +1.0 Outlook ▲ Expanded moderately. |
| Chicago Growing +1.0 Strong, but expansion moderated further. |
| St. Louis Flat Business conditions remain steady. |
| Minneapolis Growing +2.0 Economic activity remains hot. |
| Kansas City Flat Some signs of cooling but generally solid. |
| Dallas Growing +1.0 Outlook ▶ Overall activity increased in May. |
| San Francisco Growing +1.0 Solid expansion with some moderation. |
|
|
Where the signal is thin or split Divergences to watch | Energy — Dallas at +2 with three other +1s makes Energy the strongest weighted sector this release.
|
| | Financials — New York -1 again pulls weighted below unweighted.
|
| | Consumer Discretionary — split between strength in Minneapolis, Richmond and San Francisco and slowing in New York, Chicago and St. Louis.
|
| | Real Estate — four -1 residential reads offset by commercial strength; weighted holds up because New York is +2.
|
| | Utilities — no directional coverage; COMMUNICATION SERVICES has only San Francisco.
|
|
|
How to read this. Each Fed district’s report is scored −2 (strong contraction) to +2 (strong expansion) for each GICS sector, then weighted by the district’s share of that sector’s activity. The Prospect Score blends current conditions (25%), district outlooks (35%), momentum (20%), a sector-specific macro tilt (10%) and margin pressure (10%). The Beige Book describes regional activity, not earnings or valuations. Weights and sensitivities are illustrative. This newsletter is for information only and is not investment advice. Source: Federal Reserve Beige Book · Scored by EconomyxAI |